Initially thought to be an equity investment, the recent $300 million infusion from well-respected asset management company BlackRock to wearable tech maker Jawbone turns out to actually be loan — and a strict one, at that.
The difference in this iteration of Jawbone funding (aside from using debt rather than equity) is that the company is under BlackRock’s operational thumb; the finance giant now has a big say in Jawbone’s activities, from asset management to employee hiring and firing.
Despite being valued at $3 billion recently, Business Insider called Jawbone a “tech unicorn,” meaning its private-market value is larger than $1 billion which puts the company at greater risk of failure. Bloomberg wrote last year that Jawbone’s troubles somewhat come as a result of an unstable business plan, having jumped from a focus on Bluetooth headsets to fitness (and now payment-capable) bands.
This development is especially interesting considering the recent appointment of former Google exec Sameer Samat to president of Jawbone. It is hard to believe a stalwart employee would abandon a solid ship for a sinking one, so one can’t help but wonder whether he’s got some tricks up his sleeve.